With businesses across the region feeling the ripple effects of ongoing geopolitical tensions, some companies are tightening their budgets, which directly impacts employees. From delayed salaries to sudden unpaid leave, these measures are raising serious concerns among workers in the UAE. But how much of this is actually legal? We’ve broken down exactly what your rights are, and what your employer can and cannot do!
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Can Employers Cut Salaries Without Your Consent?
The short answer to this is ’no’. Your salary is part of a legally binding employment contract, and it cannot be changed on a whim. Any reduction must be agreed upon by both you and your employer. Without that agreement, a salary cut is considered a breach of contract. That said, consent doesn’t always have to be loud and obvious. It can be:
- Explicit: where you sign a revised agreement
- Implied: where you continue working and accept reduced pay without formally objecting
However, implied consent isn’t automatic. If the reduction is temporary and you’ve raised concerns, it’s unlikely to be seen as acceptance. This is where timing and your response both matter.
Delayed Or Missing Salaries
Delaying salaries is not allowed, even if a company is struggling financially. Paying employees on time is a core legal obligation, and skipping or postponing salaries puts employers in breach of their duties. Employees are also treated as priority creditors, meaning salaries should be paid before other non-essential expenses. If a company continues spending elsewhere but delays wages, it could raise serious questions about fairness and compliance.
Can You Be Forced Onto Unpaid Leave?
No, unpaid leave must always be voluntary. Employers cannot place you on unpaid leave without your clear agreement. Doing so would violate the terms of your contract. However, paid annual leave works differently. Employers can:
- Schedule your leave
- Decide when you take it
- Do so based on business needs (with proper notice)
The key distinction?
- Paid leave can be directed
- Unpaid leave must be agreed upon
What If A Company Truly Can’t Afford Salaries?
If a business genuinely cannot meet payroll, it still has to follow legal routes. Some of the options include:
- Mutually agreed upon unpaid leave
- Salary deferrals (essentially treating it like a loan to the company)
- Termination, if necessary
In cases where salaries are deferred, everything should be documented clearly, including:
- How much is deferred
- When will it be repaid
- The repayment method
- Any protections for the employee/ reimbursements for fines etc.
And, once the company recovers, it is legally required to repay what’s owed.
Are Any Industries Excluded From This Law?
No, there are no special exceptions. Even industries like tourism, hospitality, or events, which may face heavier financial pressure, must still follow the same labour laws. Employers are required to:
- Pay wages on time through the Wage Protection System
- Obtain employee consent for salary reductions or unpaid leave
Unless specific temporary rules are introduced (as during COVID-19), companies must rely on mutual agreements rather than unilateral decisions.
The bottom line is your salary isn’t optional, and neither are your rights. While companies can explore flexible arrangements during these unprecedented times, they can’t make decisions without your consent. Stay informed and keep following Gulf Buzz for all the latest updates!
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